Try turning the engine over by hand with a valve cover off...note any difficulties or funny noises. You can run a leak-down test at this time to determine any leakage due to valves sticking....report results
Check engine timing at idle and 2000 rpm, with vacuum advance disconnected...report results
Check engine vacuum under same parameters...report results...
Are you refering to the valve lash too tight or not enough clearance between the valve stem/guide?
66 PI motors had a solid lift cam if I remember correctly, 67 were hydraulic... Make sure the outter ring on the balancer hasn't slipped, when you set the timing on a motor with a bad balancer, the timing will be retarded, causing a sluggish throttle response.
Put a timing light on it and watch it when you blip the throttle. If it doesn't immediately advance then check the vacuum advance unit on the distributor. When that's working correctly time it with the "advance 'til it pings and back it off a notch" method.
If the valves are tight your compression will be low, yours isn't.